Correlation Between Amana Developing and Hartford Schroders

Can any of the company-specific risk be diversified away by investing in both Amana Developing and Hartford Schroders at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Amana Developing and Hartford Schroders into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Amana Developing World and Hartford Schroders Emerging, you can compare the effects of market volatilities on Amana Developing and Hartford Schroders and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Amana Developing with a short position of Hartford Schroders. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amana Developing and Hartford Schroders.

Diversification Opportunities for Amana Developing and Hartford Schroders

0.95

Correlation Coefficient

Amana Developing  Hartford Schroders

Almost no diversification

The 3 months correlation between Amana and Hartford is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Amana Developing World and Hartford Schroders Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Schroders and Amana Developing is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Amana Developing World are associated (or correlated) with Hartford Schroders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Schroders has no effect on the direction of Amana Developing i.e., Amana Developing and Hartford Schroders go up and down completely randomly.

Pair Corralation between Amana Developing and Hartford Schroders

Assuming the 90 days horizon Amana Developing World is expected to under-perform the Hartford Schroders. But the mutual fund apears to be less risky and, when comparing its historical volatility, Amana Developing World is 1.15 times less risky than Hartford Schroders. The mutual fund trades about -0.35 of its potential returns per unit of risk. The Hartford Schroders Emerging is currently generating about -0.17 of returns per unit of risk over similar time horizon. If you would invest  1,621  in Hartford Schroders Emerging on January 20, 2024 and sell it today you would lose (42.00) from holding Hartford Schroders Emerging or give up 2.59% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	95.45%
Values	Daily Returns

Amana Developing World  vs.  Hartford Schroders Emerging

Amana Developing World

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Amana Developing World are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Amana Developing is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Hartford Schroders

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hartford Schroders Emerging are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Hartford Schroders is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Amana Developing and Hartford Schroders

The main advantage of trading using opposite Amana Developing and Hartford Schroders positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amana Developing position performs unexpectedly, Hartford Schroders can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Hartford Schroders will offset losses from the drop in Hartford Schroders' long position.

The idea behind Amana Developing World and Hartford Schroders Emerging pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.